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I think I don't understand what capital intensity means here. If the margin is low, doesn't it mean that it's capital intensive? In the example, $75M is require
by aflag 7y ago
I think I don't understand what capital intensity means here. If the margin is low, doesn't it mean that it's capital intensive? In the example, $75M is required to get $25M. Isn't that intensive?
- formercoder 7y agoCapital intensity has to do with net operating assets (PP&E, working capital). It’s capital intensive if you have to build a $1B plant in order to make a 1% margin.
- arethuza 7y agoROCE (Return On Capital Employed) is a common measure in capital intensive businesses.